Restructuring and Strategic Charges

During the fourth quarter of fiscal 2014, we initiated a restructuring program, including the acceleration of domestic store closures and an organizational realignment, to ensure that resources align with long-term growth initiatives. In fiscal 2015, in connection with the restructuring program, we completed an evaluation of the Boston Proper brand, completed the sale of the Boston Proper direct-to-consumer business, and closed its stores.

During the first quarter of fiscal 2016, we expanded our restructuring program to include components of our strategic initiatives that further align the organizational structure with long-term growth initiatives and to reduce cost of goods sold ("COGS") and selling, general and administrative expenses ("SG&A") through strategic initiatives. These strategic initiatives include realigning marketing and digital commerce, improving supply chain efficiency, reducing non-merchandise expenses, optimizing marketing spend, and transition of executive leadership. In connection with this program, during the second quarter of fiscal 2016, we recorded pre-tax restructuring and strategic charges of $16.6 million, primarily related to severance charges, proxy solicitation costs and consulting fees, which are included in restructuring and strategic charges in the accompanying condensed statement of income. Effective in the third quarter of fiscal 2016, we substantially completed our restructuring program and did not record any similar charges for the twenty-six weeks ended July 29, 2017. We have closed 124 stores in connection with our restructuring program through the second quarter of fiscal 2017, including 20 Boston Proper stores.

A summary of the pre-tax restructuring and strategic charges is presented in the table below:



	Thirteen Weeks Ended			Twenty-Six Weeks Ended
	July 30, 2016			July 30, 2016

	(in thousands)
Impairment charges	$	1,453		$	1,453
Continuing employee-related costs	—			1,015
Severance charges	8,236			9,420
Proxy solicitation costs	4,524			5,589
Lease termination charges	127			348
Outside Services	2,234			2,234
Other charges	(18		)	148
Total restructuring and strategic charges, pre-tax	$	16,556		$	20,207

As of July 29, 2017, a reserve of $1.3 million related to restructuring and strategic activities was included in other current and deferred liabilities in the accompanying condensed consolidated balance sheets. A roll-forward of the reserve is presented as follows:



	Continuing Employee-related Costs			Severance Charges			Lease Termination Charges			Outside Services & Other			Total

	(in thousands)
Beginning Balance, January 28, 2017	$	671		$	2,413		$	846		$	7,299		$	11,229
Payments	(360		)	(2,151		)	(142		)	(7,299		)	(9,952		)
Ending Balance, July 29, 2017	$	311		$	262		$	704		$	—		$	1,277